Learning and Profiting from Black Swan Events — Val Agostino, Monarch Money

David Barnard:

Welcome to the Sub Club Podcast, a show dedicated to the best practices for building and growing app businesses. We sit down with the entrepreneurs, investors, and builders behind the most successful apps in the world to learn from their successes and failures. Sub Club is brought to you by RevenueCat. Thousands of the world's best apps trust RevenueCat to power in-app purchases, manage customers, and grow revenue across iOS, Android, and the web. You can learn more at revenuecat.com. Let's get into the show. Hello, I'm your host, David Barnard, and my guest today is Val Agostino, co-founder and CEO at Monarch Money, his fifth startup. Val was previously the first product manager on the original Mint.com team. On the podcast I talked with Val about the importance of passion for the product you're working on, how to differentiate in a crowded market, and why achieving the viable in minimum viable product is harder than ever. Hey Val, thanks so much for joining me on the podcast today.

Val Agostino:

Thanks, David. It's great to be ere.

David Barnard:

I've been meeting you, have you on for a long time because you and I spoke, gosh, right after I joined RevenueCat in 2019.

Val Agostino:

Yeah, it's been a while.

David Barnard:

It has. It's been a while and I've kind of watched... Well, I became a customer of Monarch pretty soon after that, and so I've watched the progress from the sidelines. I kept meaning to have you on, and then some big things happened in the fall. We'll get to that. Yeah, it's a great time to have you on with the recent success and Mint finally shutting down. And that's actually where I wanted to kick things off. So you were at Mint for a while, and then after Mint you eventually decided to compete against the old company that you used to work for.

To start things off, so many people go build a meditation app in an already crowded category, me building a weather app like an idiot in such a crowded category. But I feel like not too many people think through deeply, "How am I truly going to differentiate?" And it seems like the founding of Monarch was your kind of recognition that there was a lot more that you could do with Monarch than was done at Mint. So tell me that story of why you decided to compete against Mint, such a behemoth in the industry.

Val Agostino:

Yeah. I was the first product manager on the original team that launched Mint. And Mint was a very fast exit. From launch to acquisition was only two years. And what we saw on the product side was people love seeing all their financial stuff in one place, and Mint was kind of the first online solution to do that. Of course, Quicken existed long before that, but you had to manually enter everything. So people loved seeing everything in one place, but then it also became very evident that tracking and budgeting just helps you see what happened in the past. And a lot of people needed help with planning for the future and understanding their goals and creating a forecast. And historically you might, if you wanted to do that kind of thing, you'd work with a financial planner, but that industry only wants clients that typically generate three to $5,000 or more per year in fees.

And so it basically prices out about 80% of the US population. So we were thinking about this back at Mint just like, "Hey, can we build a technology or software based solution to help people with this financial planning use case?" It seemed like that was the obvious next step and where to go. However, at the same time, our business model just wasn't working. We were bleeding money. Many people don't know this, but the aggregation costs of financial data is very, very high. So to have a free product that's paying these massive fees to the data aggregators, we were basically losing a decent amount of money on every user. Mint was ad supported, but we just weren't making enough revenue. So we were about to undergo this kind of pivot, and that was right when Intuit came along and offered to buy the company. So weighed options there, ultimately decided, okay, this is probably the best outcome at the time.

And then when we got inside of Intuit, their strategic business case was they just wanted to funnel folks into TurboTax, which is their big moneymaker. Over time, it became pretty clear there wasn't much appetite to invest in Mint as a product going forward. And so the whole original Mint team, including myself, decided, okay, this is not really what we signed on for, and most of us left to go do other things. I built and sold a few other companies, but ultimately felt like someone needs to come along and continue what we started. It just felt like fundamentally managing the money for a household is still a massively unsolved problem. And our perspective is budgeting is kind of like the first step, but there's so many things to do after that, and honestly, we're just getting started. So we've got a ton of work to do.

I think we first had to get to that first level of, "Can we build a competitive personal finance app?" And of course then you also needed to do it across Android and iOS and the web. And so it took us honestly longer to get there than we thought. We didn't plan on COVID, we didn't plan on all of the Black Swan events, SVB blowing up, the market crashing. It's been an exciting few years to be a founder. But yeah, the real catalyst here was, "How do we actually solve this problem for people, and how do we help them achieve better financial outcomes?" And that can be defined as whatever's important to you. Maybe it's getting out of debt, maybe it's buying your first house, maybe it's getting on the same page with your partner around finances, so you stop fighting about little things. It means different things for everyone, but our feeling is building a financial operating system for the household is the starting point to get there.

David Barnard:

One of the things you mentioned in there, and it sounds like this was maybe a point of differentiation, is the business model. So you came out of the gate with Monarch as a subscription app and aligned those incentives a little more directly instead of taking that ad supported business model. Tell me a bit more about that as part of the foundation of Monarch as a company and as a competitive strategy.

Val Agostino:

Yeah, we didn't think too much about the competitive differentiation. We just sort of thought about what do we think is the right thing to do? And I got started in the internet industry in the late 90s. I'm sort of dating myself here, but I feel like as an industry, we made a mistake making everything free and ad supported in the early days. And when you look at a lot of these businesses, what you see over years, if not decades, is they ultimately become their business model. Google and Facebook are now just ad businesses. They're not search business, they're not social networks. Their customer is the advertiser, and any kind of ad supported product you see, if it's successful, it ultimately turns into that, and it creates all sorts of societal issues, but it also just creates a shitty, product because you're constantly trying to drive more and more ad revenue out of everything.

And then people wonder, "Oh, why did this thing get so crappy over time?" And I have yet to see an ad supported product that doesn't have that arc over a long period of time. Conversely, when you look at products... And just one more point on that, I think the way we think of it as direct versus indirect business models. Is the end user paying for it in a direct business model or an indirect business model? You have some third party, AKA, the advertiser paying for it, who by the way is your real customer under that model. And this was a constant tension at Mint. It was like, "How many offers can we get in front of a user per session? How do we get them to take things?" And it was really at the expense of the user experience and it was a constant battle between the revenue team and the product team.

And so just as a lifelong product guy, I want to build the best product we can for our customers, and I love these direct models, and especially subscriptions, because it reinforces the ongoing evolution of the product. So huge fans of everything you guys have built at RevenueCat and what you're doing with this podcast, foster that along. My feeling is this is really sort of a second wave of the internet. There's a whole new approach to building businesses and building better products, and you look at things like Spotify and Duolingo and a lot of the streaming apps and it's like, "Okay." A, people are willing to pay for these now. And I think consumers are sort of waking up to the fact, "Okay, if it's ad supported, then they're just after my attention. They're not actually trying to help, or after my data, they're not trying to help me actually do something." And we're just really religious about trying to build the best product for the end user. And so it felt obvious that a subscription was the right way to do that.

David Barnard:

Yeah, I used Quicken as a one-off purchase and then annual and.or every couple of years paid upgrade, and then I switched to Mint, and I used Mint for a few years. Probably in those days when you were still there. It did feel like the product just stagnated and was just less and less an enjoyable product. It seemed, after the Intuit acquisition, to stagnate. And it kind of makes sense, right? To your point, it's that I wasn't the customer. I was a byproduct of Intuit selling TurboTax, which I didn't use, and selling ads, which I was not signing up for a bunch of credit cards, and the more profitable things that I'm sure helped drive Mint as a business, credit card offers and things like that, I wasn't partaking in those. So I was not a good customer. Then I started using Monarch a few years ago and my wife and I love it. And you can tell it's just so different.

And that's the thing with the subscription app, and it's not cheap, but it's cheap compared to, like you said, a financial planner who's looking to make three to $5,000 on fees a year. It's cheap in the money we save by actually budgeting and paying more close attention to our finances and stuff. And in Monarch, I definitely feel like I'm the customer. Y'all are releasing new features and improving the app at a pace that it's enjoyable to use, and that's that alignment of business model with the customer, versus the customer not actually being the customer. In building in a space that was so mature though, what's your view on MVP, especially in regard to such a mature space like financial planning?

Val Agostino:

We had to build a lot to just get to the starting line, it felt like. In our space, everything's kind of built on top of your data quality and people think, "Oh, I'll just plug in some aggregator and everything will work." And the truth is you have to add multiple aggregators and add your own sort of intelligence layer on top of this to cleanse stuff. And so we spent millions of dollars in years building our own intelligence layer on top of the aggregators. So that required a bit of effort. But yeah, in general, I know in startup land we all bow down to the altar of the MVP and everything. I honestly think the MVP, not just in our category, but I'd say in most categories, the whole concept of it is rarely applicable. And the reason for that is when a technology is new, think about when smartphones were first out.

There was 125 flashlight apps and 73 fart apps, and everyone was running around, "Look how amazing this is. I can see in the dark." And everyone was trying everything and there was this really massive novelty factor. And I think in those early parts of an industry, if you can just get something out there and learn, it makes a lot of sense, and people are trying all these things and there's a high propensity for novelty. And then folks settle into their habits and they find their homes, and the data supports this. You guys have been great at sharing a lot of the data, but you can see over the course of years, people rarely install new apps these days. It's under 10, I think, whereas it used to be hundreds in the early days of the app store. And so you just see folks have solidified on their things, and so you really need to get somebody to change their behavior or try something new.

The bar has gone up much, much higher than it was 10 years ago, and that's both consumers and businesses also. And at the same time, there's been this Cambrian explosion of all these new apps and that kind of thing. And what you find is most people just tune it out, unless there's a compelling reason to switch. And it's been interesting to see AI, AI is the new wave right now, and there's all this novelty and people are trying all these different things in AI, but even that, you're starting to see it hit the point where folks are like, "I can't try the latest AI song generator anymore because I'm bored with song generators."

David Barnard:

How did you make the decision at Monarch? What was good enough for a 1.0? What line did you draw in the sand of like, "Okay, here's what we're going to release, and this would be too early for us to release it now, we got to wait until we have x, Y, Z features?

Val Agostino:

It's a good question, man. I still don't feel like we're at 1.0. We got a lot to do. And the good news for our audiences, our customers are super passionate, both positive and negative. So when something breaks or whatever, we hear about it, so it's painful for me when we see this stuff, it's like, "Oh my God, yes, I know we got to fix that or fix this." So we're big proponents of rapid feedback from customers, so we really just wanted to get something out there and contradicting myself. I wouldn't have called that necessarily an MVP, but we basically said, "Hey, here's where we are. Here's the roadmap that we're building."

We want to do this in partnership with the audience that are power users of these types of tools. And so our audience can vote on the Monarch roadmap. We have, I think, over 15,000 votes on different items and stuff, and many, many comments. And people will write dissertations around their theory of how they budget for this or that or whatnot. And we read through all that stuff. That was our key, was to get something out there, so we start getting that feedback. And we were in private beta, I think, for the first, I don't know, year or so with a pretty small group, few hundred users, and then we launched in public beta in early 21. It's been off the races since then.

David Barnard:

I don't think that's contradictory. I think the standard thinking of MVP is like get something super simple and see what works. But I think the key is that the viable part in a minimally viable product, the viable has such a higher bar in 2024, is that what has traditionally been work for two months and get the MVP out there and started getting feedback, it's more like depending on the category, and there are exceptions, but that viable part might actually take a little more time these days than it ever has in the past.

Val Agostino:

Yeah. You really have to focus on the customer, job to be done. And I think that the jobs have matured over time.

David Barnard:

That's a good next place to go is the jobs to be done. I know that's something you think a lot about inside Monarch. How do you apply that jobs to be done framework in the product building at Monarch?

Val Agostino:

First of all, we get the feedback from the customers. So we do that through various mechanisms, interviews, survey data, our roadmap comments that I mentioned. So we have a pretty good sense for what people are trying to achieve before we ever build something. And then we state it in this sort of jobs to be done framework of, 'Okay, as a customer, what am I hiring this product to do for me or this feature to do for me?" And it's not often what the feature says on the box, it's often some kind of underlying emotional need or functional need or whatever. And so it really helps us to hypothesize what those are, but then also dig in and check our assumptions.

David Barnard:

Are there any specific examples from Monarch that you can cite of "Here's what people ask for, here's some of the analysis we did, and then here's the formulation of that jobs to be done," understanding of it, and then contrasting that to what the feature says on the tin?

Val Agostino:

We are working on one right now, which is due dates on your bills. So being able to see, okay, your upcoming bills and the amounts and all that kind of stuff. And at the outset you'd think, "Okay, I want to pay my bills on time." But as we dig into it, we found that... And this, by the way, this was a feature that Mint had that we did not have in Monarch. And then when a lot of the Mint users came over, they've been asking for this, so we've been working on it or pushing it along, I should say, since then. And we found that a large part of that audience were folks that either struggled with ADD, and so having a single place to see everything in one spot was super valuable and helped them keep everything up to date.

But also another job to be done is ensuring that you have enough cash set aside to cover your upcoming bills. And even what's surprising about that is it doesn't really matter what your income or net worth levels are. We see that kind of across different personas. A lot of folks are like, "Hey, I've got all these incomings and outgoings and I just need to make sure that my balances map out correctly at the end of the month," or whatever. So yeah, that's an example where just listen to what feature people are asking for, it doesn't get to some of the more emotional reasons behind it.

David Barnard:

What are some of the other ways that you apply jobs to be done, and any other examples that you have?

Val Agostino:

We really start our whole products kick off through that. So it's like, hey, not only do we specify the jobs to be done, but then we stack rank them. And as a team we try to figure out what's most important. Then we will basically go straight into product specs and designs at that point. So we typically create clickable prototypes. And then we'll actually run those by the customers that voted on a particular feature. So we get the feedback pretty rapidly, like, "Hey, is this thing going to solve your need or not?" And so we're able to iterate, again, in concert with our customers in that manner. And that's a big part of our development process.

Honestly, it takes longer than probably the traditional approach, but we feel like you have to do fewer iterations. You've worked in software for a long time, and the classic thing is like, "Oh, get one version out there, build it, ship it, look at the data, figure out what people liked, what they didn't like, and then rinse and repeat." And that whole thing just took you three months and then you're going to do another three months, and finally to get to where you're trying to get, maybe you've spent nine months and three dot releases on something. Whereas if you can do more upfront iteration, it might take you longer, but the end result is better.

David Barnard:

So let's go through that whole loop, because I do think more apps could benefit from this. And funny enough, I have not seen this in Monarch, so I don't know if it's only in the beta program or if I just didn't stumble upon it. But first, what tool do you use and then how do you expose it to users, this whole voting on the roadmap?

Val Agostino:

So we use Productboard today and it's linked. People can submit requests, they can view the roadmap, it's in our account menu or whatever. So that's the primary mechanism. And then Productboard makes it easy to reach out to those individuals and slice and dice them in different ways and that kind of thing.

David Barnard:

Gotcha. Okay. I'm looking in the app right now and I found it. So you have a row in settings, feature requests, which it's a great jobs to be done analysis of how do you get somebody to actually participate in this voting system? And it's like, well, of course people want to request a feature. And so you tap on feature requests and it takes you to the Productboard page where you see a bunch of ideas up next in progress and whatnot. So you take those ideas, you allow people to vote them up or down. And then... How do you balance maybe ones that's voted to the top as just something the team doesn't think it's the right direction for the product? How do you balance the kind of product intuition against that more directly building what the users ask and/or doing both at the same time?

Val Agostino:

Yeah, it's more art than science. And it does lead to some consternation amongst customers. "Why has this thing been on here so long? How come you haven't shipped feature XYZ? What's wrong with you people?" There's a number of things that dial into it. It can be... Oftentimes we're like, "Hey, do we think we can deliver a great experience on this?" So people will often ask for something. A lot of what we do requires data partners, and so sometimes we'll spin up different data partners, we'll run tasks, and we'll just come to the conclusion like, "This isn't going to work or it's not going to be the kind of experience we want to deliver." And so in those cases we're just like, "Hey, we're going to keep looking or wait for other data partners or try to find other avenues here." Sometimes the amount of demand doesn't justify the development effort that would go into something. So it's a combination of we have our strategic roadmap, but we are opinionated, but willing to change our mind based on customer input.

David Barnard:

So jobs to be done is helpful, and it sounds like that's kind of a primary framework that you work through, but it doesn't necessarily handle everything, and there's tons of other product discovery that you need to do. What are some of the other frameworks that you use in this product discovery and understanding what to build for the users?

Val Agostino:

We make pretty heavy use of personas, especially in our category. Personal finance is relevant to everybody technically and-

David Barnard:

Just the old, Everybody's my tam."

Val Agostino:

Yes.

David Barnard:

But if everybody's your tam, you can't actually serve everybody, so you've got to figure out who you can actually serve and why. Yeah.

Val Agostino:

Yeah, that's been honestly one of the biggest opportunities/challenges for us is because people are so passionate about this. You get a college student who's really trying to establish healthy financial behaviors, but can't imagine why you would want all these other features. And they're like, "Can't you just give me a free version that just connects all my stuff and does exactly what I need?" And then on the other end of the spectrum, you might have a retiree with millions of dollars in assets connected and they want very robust wealth management and reporting and that kind of thing. Those are clearly different use cases, but when you dig into it, they all want tracking and budgeting and automatic classification and net worth, and all this kind of stuff. So, we've had to get very clear on what are these personas? And again, it's kind of like they have different jobs to be done, so they slot under these personas.

And that's been very helpful for us to decide, okay, which personas are we focusing on and going after and what's the messaging that attracts them and so on and so forth. So that's one. The other is the five whys out of the Toyota production system made this famous where they'd have some problem and kind of ask why, and they say ask five times. But the goal is to get to the root cause. Why is something actually broken or confusing or whatever? And if you drill down five times, you'll often get to that root cause. And so this comes back to that jobs to be done thing when people will often ask, "Oh, I want this. I really need it to do X, Y, Z." And if you ask why five times, and often it just takes three, you'll come to some sort of often core emotional problem that they're trying to solve or tactical problem or whatever. And it gives you just much better perspective and clarity on actually what you're trying to do.

David Barnard:

Wait, do you have, again, another concrete example of how the five whys have helped dig into a specific need from the customer?

Val Agostino:

This is perhaps not that surprising, but the space that we're in, a lot of people say, "Oh, I want to see everything in one place." At least at that personal finance tier, that's one of the core value props. And if you dig into "What does that get you?" And people are often like, "Oh, then I can check on things and I can have some comfort that I know what's happening with my money," and so on and so forth. And if you keep drilling down, what you often find is there's this sense of I want to be in control. Humans have a need for control, and it's this feeling of order from chaos, and that's a big emotional driver at that level.

I don't know how many times we had to double click in there to get that, but it wasn't five. It's probably, again, three or so. And so that's helped us realize, okay, what are other things... How can we change our messaging? And honestly, we haven't done this well because our team's been so small, but now that we're staffing up, we're going to lean more into this. But as you come up with those things, it's like, okay, how do we change our marketing to align with that and so on and so forth.

David Barnard:

Stepping through that, let's ask me the five whys. So I use Monarch and I like the view, I'm looking at it right now, of everything in one place. And the initial why is like, yeah, it's like, "Why do you want that? Well, I want to see what's going on with my finances." It's like, "Why do you want to see what's going on with your finances?" Well, digging into those whys and really understanding the depths of why somebody cares and what they really care about, having control of your finances or satisfying those anxieties of not having enough, or worrying you're not going to be able to pay bills or whatever. Because so often we're tempted to sell our products. And so in your product marketing, in your app store screenshots and everything else, you want to show that view of all your finances in one place.

But what you're selling is not all your finances in one place. What you're selling is the control, the calming that anxiety. And there's a great illustration I've seen, actually Thomas Pettit has this pinned to his Twitter. That's where I always go when I want to see it. It's Mario, the little Mario, and then you have the little flower that Mario gets to be like Mario with the fireballs. A lot of people sell the flower, but what you really want to sell is the badass with the fireballs attacking the boss. But then what you're really, really selling is why do you want to be the badass with the fireballs? To save the princess. As a marketer, you got to get down through those whys to understand what you're really selling is saving the princess. You're not even selling the awesome Mario with fireballs, you're selling Mario actually being able to save the princess. And so it's cool that yeah, as you get through those whys, it's not just about building a better product, but it's actually about better marketing the product that you've built.

Val Agostino:

Yep, exactly.

David Barnard:

So next up I wanted to talk about Mint shutting down. So we've been building up to this. You were at Mint, then you solve the problems at Mint, you built Monarch, and you've got a really deep care for the product and building something that's really genuinely helpful to users. And you've been toiling away at this for years. I feel like Monarch, in your journey, is the perfect example of the saying, "Luck is when preparation meets opportunity," is that you've been preparing for years, building this product that you're passionate about that really serves users, using the jobs to be done framework, asking the whys, and really building something and even aligning the business model with subscriptions, and then announced the shutdown in the fall. It must have just been insane moment for you all as a company. So talk me through, how did you hear and then what's happened since?

Val Agostino:

Yeah. It's been wild, and I'll rewind the clock a little bit and just say that, A, we have been super committed to solving this for people, but, like many companies we've struggled. I've been doing this for 25 years now, which is crazy to say out loud, but the last five years have been the most with all the Black Swan events and COVID, and the things that we mentioned. And so as a team, we tried to stay pretty small and control our destiny. Even though we have raised venture money, we wanted to get to break even and control our destiny so we're not constantly on that loop. And so that was our goal and where we were headed. And then the Mint thing hit, and we were a small team of 13 full-time people, and then a couple outsourced customer support. And then it was just off to the races.

Our daily signup rate increased like 20 to 30x overnight, and has basically stayed in that range since then. So I'm not complaining, it's been a great problem to have. But we really had to scramble to add capacity to our database every few hours to... We increased our customer support team from three people to 20 odd people. And of course we then had the massive backlog of CS tickets where people are hating us because we couldn't get back to them for days and sometimes weeks. It was painful. But now thankfully we're caught up. We were back to our 24-hour response time. We had to scramble quite a bit to take on the demand.

David Barnard:

So how did you hear about it? Did you still have friends at Mint? Did you have any idea this was coming or was it just out of the blue, you're reading on Twitter, the TechCrunch and you see this article, "Mint shutting down?"

Val Agostino:

Mint posted something to their support forum saying, "Mint's going away and we're going to be migrating folks to Credit Karma," but they didn't say when. And of course Mint had a pretty active Reddit community and Redditors love to dig up that kind of stuff. So it was sort of chumming the water a little bit. And so of course that got picked up, and then we had no idea what was going on, but we already had built a Mint importer. And I wrote a blog post that evening just saying, "Hey, as the first product manager on Mint, we don't know what's happening, but this is why we think you should pay for our personal finance product.

We've seen how impactful they are on people's lives. We're here to actually solve this for people and why you should consider Monarch." So I drafted this blog post. That was October 31st, I think. And then the next day they officially announced that they were going to be shutting it down because it had already, I guess, come out. And so I revised my blog post pretty quickly, and we posted that. And that got picked up on a number of channels and the press and that kind of thing. And that's what lit the fuse.

David Barnard:

Another great example of preparation meeting opportunity is that you were already working on that blog post based on the rumors that seemed like something was going on over at Mint, so that the blog post was ready to go that next day when it actually was announced and getting that kind of traction. That day that it was finally announced officially that Mint was shutting down, was it all hands on deck, "Okay, guys, this is a big deal. Our business is about to change, our lives are about to change?"

Val Agostino:

Oh yeah. It was immediately clear that everything was different. All of our graphs were up, all of our CPU monitors were going off on our AWS instance. Yeah, we scrambled and have been, and again, we were a small team. We only had five or six engineers, counting my co-founder at that point. And so all through the holidays people were working around the clock and whatnot to just try and keep... Even just keeping the service running, in all of that we only had about an hour and 10 minutes of downtime. It's been five months since-

David Barnard:

That's incredible.

Val Agostino:

... and we've upgraded our database six or seven times. We've increased our capacity. We've had to do all kinds of behind the scenes things to keep the system running that doesn't add immediate value to consumers. And so the downside of some of this is we've had to push out our traditional roadmap in order to add capacity and also add some of the features. As an example, we did not intend to go into Canada for some time, but there was enough Canadian Mint users that were super frustrated Mint was going away, and there are not really great alternatives in Canada. And so many of them were hacking Monarch and changing their IP address or whatever in order to sign up and add Canadian institutions.

And we finally just said, okay, we're going to turn this on and kind of beta and see what happens. And honestly, it's been a little bit of a mixed bag. Canadian institutions do not have the same data connectivity that American institutions have. And so we've had some frustrated Canadian customers and we just offer them a refund, and a lot of them are happy. But that's a good example of something that wasn't even on our plan for the next 12 months, but it became immediately clear, this is an opportunity to do something here. I'm glad we did it, but we definitely have to add more support for Canadian institutions which we're working on.

David Barnard:

How has it been positioning yourself against other competitors when a Black Swan event like this comes along? People listening to this podcast may never run into something like this, but they may. And in the weather category, last year, a lot of apps saw a huge influx when Apple Weather went down. There are these times when things like this happen when... COVID, all these fitness apps needing to switch to at-home workouts, and a lot of apps blew up during COVID. They weren't expecting the hockey stick growth. You go viral, David Smith went viral with Widgetsmith. Although it's not necessarily going to happen to a large percentage of the people listening. If something like this happens to somebody else, any kind of advice? And how have you looked to best leverage this while just trying to keep the wheels on the bus?

Val Agostino:

I think what we've been pretty good at is... When something like this happens, you have to just stop yourself and say, "Okay, what does the new reality look like?" And divorce yourself from your previous decisions. And folks often have the sunk costs and it's like, "Oh wait, we've already decided we're going to do XYZ and we've told people we're doing XYZ." It's really hard to... We had promised a few big features to our user base, and a lot of folks are still waiting for some of these things. We're overhauling our goals feature, which is our whole planning engine, and it's a massive project, and we basically just had to put that on hold and say, "We've got to do this infrastructure work.

We've got to support these Mint users. We've got to..." and in doing so it's going to get us the revenue and the resources to do these other things. But we basically had to really stop doing everything that we had told our investors and our customers and everything else that we were going to do and just decide, "Okay, starting now what are the most important things going forward and how do we stack rank these and how quickly can we get on it?" And we upgraded our Chrome extension because it was having some issues with capacity. And we got a whole new Chrome extension out in like 48 hours, whereas some of our peers started working on this when it happened, and it took them six weeks or longer to get an import thing launched.

And so it's a combination, I think, of having A, the talent, the team that's able to move quickly, B, the urgency and the wherewithal to make those decisions and just get aligned as a group. And that's when good stuff happens. It was the same thing when SVB went down, and we were banking with Silicon Valley Bank. It was like, "Holy shit, maybe we're dead, maybe we're not. We don't know." And we had to scramble to get other lines of capital in place pretty quickly just as a backstop in case something happened.

David Barnard:

Wow, so you had two Black Swans in the same year. So that was March-

Val Agostino:

No, it's been, wow. We had, obviously COVID, but then a lot of our team... Our team's remote in California and the Pacific Northwest mostly. We had a lot of folks displaced with fires. We had folks... This is going back a few years, with a lot of the sort of social unrest in Seattle and Portland disrupted folks. Obviously the market totally course correcting and so on and so forth, ATT rolling out. There's a lot of these things that were existential that have been pretty big blips. So the Mint shutdown was the first one that was positive, so I think we've earned it.

David Barnard:

Again, preparation meeting opportunity. You fought a lot of fires and had to... I like that too, talking about speed of execution, is that you can build that muscle so that when an opportunity does present itself, the team is ready to capitalize on it and to move quickly. And then that's just a good muscle to build anyway as a product team, to be able to move quickly and build and iterate. How have you thought about positioning and capitalizing as much as you can on this transition away from Mint? Is there specific marketing and other things that you've done to maximize this opportunity?

Val Agostino:

I'm sure we haven't maximized it as much as we can. We didn't really have a marketing team when this happened. We were the founders, we were doing it ourselves. And since then we've been bringing people on board and building out that team. So I think on the marketing side... And of course we're working with agencies and stuff, so we probably under executed there, but what we did do well was we really communicated with the Mint folks, primarily through Reddit and just said, "Hey, here's our philosophy. This is why we're doing it. We're in it for the long haul. Our goal is to actually solve this problem for people."

And we acknowledge we're just getting started, even though we're five years into this, there's institutions that are still flaky, there's features that we need to add. We're 20% into our journey if that, and so we've got a long roadmap of stuff to build. And I think people like that, "Okay, these folks sound authentic, they sound like they're here to actually listen to us and build it." And that, I think, for at least that audience, who, by the way, you got to remember, they just felt like they got screwed over by one of their favorite apps in some cases. So there was a lot of emotional drive to find something new that they felt like they could trust.

David Barnard:

Yeah, the trust is a big thing. Again, if you ask the wise, "Why are you switching from it? Well, Mint's shutting down. Okay, well what are you looking for in the new product and why Monarch versus the competitors?" Mint, you said, was automatically trying to transition some people to another tool.

Val Agostino:

Yeah. You can... Intuit by Credit Karma. And if you look out through that lens, their decision made sense. Credit Karma had hundreds of millions of users and was generating billions of dollars in ad revenue. Mint was losing money, so they were kind of like, "Hey, we'll just..." I can see the meeting now. They're probably like, "Why is this thing even here? Let's turn it off and just push those people into Credit Karma." And of course, Credit Karma doesn't do a lot of the personal finance stuff, and so I'm sure many people moved over and some people are probably happy, but a lot of people are not. So that was their transition plan, and so we just said, "Hey, here's what Monarch does and here's what we're adding." And I think that helped people feel comfortable there.

David Barnard:

What's next for Monarch Money in the company building not in the product? I think a lot of our listeners are more interested in what's next strategically, what's next in building out the company, what's next in marketing and things like that.

Val Agostino:

Yeah. So first and foremost, we're leveraging the revenue and new user base to staff up very dramatically so that we can really just invest more in product development. So we have about 25 roles we're recruiting for right now. Most of those are engineering, product design, so if anyone's listening to this, you can apply on our website if you're interested in this space. That's the main thing. And then obviously that translates into just more roadmap and building here. We are also investing in marketing, but specifically in content. And so our feeling has always been that to solve this problem for people, yes, you need a product and a tool, but you also need some level of education to help folks understand some of these concepts.

It's really a shame that we go through our school system in this country and you learn stuff like photosynthesis, that's important, but it's not something you really need every day. Whereas things like how credit cards work, no one's ever taught this until they oftentimes run into credit card debt, and then get themselves in trouble, and they're like, "Oh my gosh, I need to do something different here." So our hope is that we can provide the missing personal finance course that people should get in high school or college and just help teach folks those basics. So we're building out that team currently.

David Barnard:

So we've talked a lot about Monarch the product and product thinking and where you're headed, but since this all happened in the fall, you must be putting in a lot of 80 hour weeks, or maybe more than 80 hour weeks. What's the why for you? We've talked about the five whys of asking good product questions, but there's also the whys of building a company and running a business, and caring enough to do those 80 hour weeks. What are your whys?

Val Agostino:

I guess personally I've felt this pain pretty acutely. As a founder, you know this, you go through periods where you basically pay yourself nothing, and so it's an emotional rollercoaster even... And then you add on the financial rollercoaster on top of it. So I always had my own spreadsheets and models and all that kind of stuff that I would use to try and figure out, "Okay, is our family going to be okay?" And we made the decision when my kids were young that my wife would stay home and do that primarily. And we were living in the Bay Area, so here we were a family of five on a founder's salary, just basically bleeding money every month. And so I was very intently watching everything and using all of these products, and that's ultimately when I landed at Mint. So there's that personal level. Then when I was at Mint, I saw firsthand how much people just struggle with finances. When you dig into the research, finances are the number one source of stress in American families.

It's the number one cause of divorce. It's one of the primary causes of depression and suicide. Not even getting into some of the societal inequity stuff. And you realize another truism that most people don't know is that financial health is actually more a function of behavior than it is your income. And it's like physical health in that way. If you can be consistent about walking a little bit every day, you're going to be in a much healthier position than if you try to run a marathon once every five years, for example. And it's the same with finances. If you do the small things day in and day out, you will ultimately be successful or financially healthy, I should say. So those were some of the learnings along the way. And honestly, I don't know that I would have picked that up had I not been at Mint and done so many customer interviews. And so on the one hand it was like, here we have this acute pain and problem, and felt to me like we were just getting started, and then all of a sudden it stopped.

It was like, okay, the train tracks just ended or the bridge ended. And I was like, "We got to finish the bridge. We haven't crossed over this river yet," or whatever this analogy I'm putting together here means. And our team is just very passionate about that. Everyone on the team has a similar story about growing up in financially constrained homes or challenges on this, and so many of them have come at it from different angles, and it makes us, I think, pretty empathetic group. But it's great to work on something that you can see firsthand. We get hundreds a week of people emailing us and just being like, "Oh my gosh, my husband or my wife and I are no longer fighting about money. Or I can walk into a grocery store and not have a panic attack about bouncing a check because I know how much cash I have." And you start to realize the real impact these types of things have on people's lives. So it's very rewarding. And like I said, it feels like we're just kind of getting started here.

David Barnard:

I think that's a good point too, in product building generally, and then startups more specifically, is that if you're going to go build an app you don't care about and then think about working on that for the next 10 years of your life. It's really great to hear the passion that you have for it. I'm sure that helps drive sticking it out through those hard times.

Val Agostino:

Yeah. There's a ton of up and down in startups, as you know, I'm assuming most of your audience does as well. And YC has this famous saying, "Startups die for two reasons. They either run out of money or the founders quit." And everyone thinks it's mostly the money part, but when you get behind the scenes, you realize a lot of companies just die because the founding team is like, "I don't want to do this anymore. It's too painful. I don't believe in it. We're not having fun." Not that they're really fun to begin with, but you know what I mean.

David Barnard:

Don't start a startup because you think it's going to be fun.

Val Agostino:

Yeah. Exactly. So I always tell entrepreneurs, try and pick a problem that you want to work on for 10 years, even if it were to fail. And that's how I feel. Even if Monarch were to fail, I would feel good that we move the ball forward. We did something, we helped people along the way and so on and so forth. I think if you use that litmus test, it quickly filters out a lot of companies that you might start, where you're like, "Okay, would I do this if I knew I wasn't ever going to have an exit?" And I don't know. I think that's a good litmus test for what you should work on.

David Barnard:

Well, I think that's a really great place to wrap it up. So I was looking for you online and was going to link, like I typically do, to Twitter and LinkedIn and all that, but you're a hard man to find online.

Val Agostino:

I am online. I have a Twitter and LinkedIn profile. I will say that I spend very little time on social media by design. I've got three kids. I take care of my aging mom who has dementia, and then of course I'm running Monarch. So all my time goes into those three things. But if you want to DM me on Twitter, I will see that and I may respond and I may not.

David Barnard:

Great way to put it.

Val Agostino:

Yes.

David Barnard:

No, you've got a lot going on. Maybe we won't link to your Twitter or LinkedIn.

Val Agostino:

That's fine. It's okay.

David Barnard:

But I did want to say, I think the most interesting things folks can get in touch with, and you touched on this already, is that Monarch is growing like crazy and needs good people. You mentioned already you have 20 something job posting. Any specific ones you want to call out for this audience?

Val Agostino:

Engineers, obviously. We've got multiple product manager roles, marketing roles. And the other thing I'll say is we do have just a open role or future opportunities, and we've hired a lot of folks through that where they're like, "Hey, I don't see something that matches what I'm doing, but I love what you guys are up to and I'd love to be a part of this." And I'd say nearly half of our team has come through that avenue. So if you don't see something on there but you're excited about this or just want to get in touch, please don't let that stop you.

David Barnard:

Cool. And then the best way for that is to not DM, is to actually go ahead and fill out the forms so that it goes to the right people.

Val Agostino:

Monarch.money/careers, and you can see them all listed there.

David Barnard:

Awesome. Well, Val, it's been so fascinating, and congrats on all the success post Mint shutdown. And congrats for building a great product. My wife and I use it. My wife and I never fought over money, but I will say a job to be done for me of Monarch money is when my wife is like, "We don't talk enough or I don't know what's going on with their finances." I'm just like, "Sweetie, log into Monarch. It's all there. I keep track. And our budgets there and our investment accounts are there." So that used to be her thing. It is like, "You don't ever tell me about what's going on with the money." I'm like, "It's all there. Look, you have a log in. Go look."

Val Agostino:

Awesome. Well, I'm glad it's working for you guys, and thank you for being a customer and a advocate.

David Barnard:

Awesome. Thanks so much, Val.

Val Agostino:

You bet. Take care.

David Barnard:

Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com to join our private community.